Pfizer Inc. (NYSE:PFE) Q4 2022 Earnings Call Transcript

Pfizer Inc. (NYSE:PFE) Q4 2022 Earnings Call Transcript January 31, 2023

Operator: Good day, everyone, and welcome to Pfizer’s Fourth Quarter 2022 Earnings Conference Call. Today’s call is being recorded. At this time, I would like to turn the call over to Mr. Chris Stevo, Senior Vice President and Chief Investor Relations Officer. Please go ahead, sir.

Chris Stevo: Good morning. Welcome to Pfizer’s fourth quarter earnings call. I’m joined today by Dr. Albert Bourla, our Chairman and CEO; Dave Denton, our CFO; Dr. Mikael Dolsten, President of Worldwide Research and Development and Medical. Joining for the Q&A session, we also have Angela Hwang, Chief Commercial Officer and President, Global Biopharmaceuticals Business; Aamir Malik, our Chief Business Innovation Officer; Dr. William Pao, our Chief Development Officer; and Doug Lankler, our General Counsel. Before we begin the call, I wanted to remind you of some of some logistical items. Materials for this call and other earnings related materials are on the Investor Relations section of pfizer.com. You see our forward-looking statements disclaimer on slide 3.

Additional information regarding these statements and our non-GAAP financial measures is available in 10-K and 10-Q under Risk Factors and Forward-Looking Information and factors that may affect future results. Forward-looking statements on the call are subject to substantial risks and uncertainties, speak only as of the call’s original date, and we undertake no obligation to update or revise any of the statements. With that, I will turn the call over to Albert.

Dr. Albert Bourla: Thank you, Chris. Hello, everyone, and thank you for joining us today. During this morning’s call, I will touch on some of our highlights from 2022, and share some thoughts regarding Pfizer’s exciting near and long-term growth plans. 2022 was an outstanding year for Pfizer on multiple fronts. We exceeded $100 billion in revenues for the first time in our 174-year history. We maintained our industry-leading clinical success rates and further improved our cycle times, which already were among the industry’s best. We were named to 10 different €œbest employer€ lists, including those published by Forbes, LinkedIn, Glassdoor and others. And most important, more than 1.3 billion patients around the world were treated with our medicines and vaccines.

A truly humbling achievement. Our key growth drivers for the full year 2022 included: global sales of Paxlovid, strong growth for Comirnaty in developed markets, the launch of Prevnar 20 for the adult population in the U.S., the continued strong growth of Eliquis globally, the strength of our Vyndaqel family globally, and the addition of newly acquired products Nurtec ODT/Vydura and Oxbryta. Looking ahead, we foresee strong operational revenue growth of 7% to 9% in 2023, excluding revenues from our COVID-19 products and the impact of foreign exchange. We expect our potential new launches, newly acquired products and inline products will all contribute to this growth. These projections include our forecasts for several important potential product launches, including our RSV vaccine for older adults, potential Prevnar 20 pediatric indication, and products and candidates that came to us through recent business development activities, including etrasimod for ulcerative colitis, Nurtec and zavegepant for migraine, and Oxbryta for sickle cell disease.

We’re in the midst of an 18-month period during which we expect to have up to an unprecedented 19 new products or indications in the market. 15 of these 19 are from our internal pipeline, with the remaining 4 coming to Pfizer, as just explained, via the recent business development deals. Recognizing the importance of these potential launches, as well as those expected in 2024, to both Pfizer and the patients who rely on our innovations, we are increasing the support we are putting behind them by investing an incremental $1.3 billion in SI&A expenses in 2023. Dave will provide more details on these investments during the presentation. One example of a product that is already benefitting from this additional support is Cibinqo, which recently has seen an improving growth trajectory that we expect to continue through the course of 2023.

In the fourth quarter of 2022, Cibinqo’s new-to-brand prescriptions grew 84% sequentially, the fastest growth rate in the class. We have started 2023 with 55% commercial formulary access, and we expect that access to continue to improve during the year, especially with the upcoming expected expansion of the U.S. indication to include adolescents, 12 to 18 year-olds, if approved. We also introduced a new direct-to-consumer campaign in November, which has increased patient awareness of Cibinqo and led to more patients asking their doctors about it. We look forward to the expected U.S. launches of etrasimod in ulcerative colitis and ritlecitinib in alopecia areata, if approved, as well as the expected launch of Abrilada, our biosimilar to Humira, to further expand our franchise in immunology this year.

However, we recognize that investors are not only interested to hear this year’s guidance, but also to understand the long-term growth prospects of the Company. Particular questions are focused on our plans to offset the expected $17 billion impact of the LOEs between 2025 and 2030, and our long-term projections for our COVID-19 products. We will try to address both, starting with this slide regarding our business, excluding COVID. As you can see in this chart, we expect the 15 of the 19 potential launches that are coming from our internal pipeline to generate 2030 revenues that will more than offset the expected LOE losses forecast for 2025 to 2030. The potential $20 billion in this chart is a risk-adjusted number. I would also point out that some of the potential launches are expected to be bigger contributors to our growth than others.

And if all 15 were to achieve their full potential, this figure could go even higher. In addition, we believe we have the ability, if successful, to add at least $25 billion of risk-adjusted revenues to our 2030 topline expectations through business-development activity. As we have said previously, we believe the deals we have already done for Arena, Biohaven, Global Blood Therapeutics and ReViral have the potential to get us more than 40% of the way there with approximately $10.5 billion in expected 2030 revenues. I am very pleased to see that the analysts’ consensus expectations for the same revenues have already reached $9.5 billion, closing materially the gap that previously existed between internal and external expectations. Four of these products have already launched or are expected to launch, subject to regulatory approval, in 2023.

We also have more than enough capital to invest in the additional opportunities needed to meet or exceed this target. And, of course, we have many more potential vaccines and medicines in our pipeline, with numerous launches expected in the 2024 to 2030 timeframe, if successful in clinical trials and approved. Some of the most promising assets include: our oral GLP-1 candidate for diabetes and obesity, all of them are under this dotted box, XB; potential combo vaccines for flu, COVID-19 and RSV; our potential vaccines for Lyme disease and shingles; multiple new oncology product candidates, including ARV-471 and our CDK4 inhibitor for endocrine receptor-positive breast cancer; our gene therapy candidates for hemophilia A, hemophilia B and Duchenne muscular dystrophy; our pan-hemophilia A&B antibody treatment; and many more.

If approved, we expect each of these to be key incremental contributors to our growth aspirations through 2025 and beyond. Even without any of these additional potential products, we expect our 2025 to 2030 revenue CAGR to be approximately 6%. And if some of them are successful, the CAGR could exceed 10%. Now, let me turn my attention to our COVID-19 portfolio. At the JP Morgan Conference earlier this month, I spoke about expecting 2023 to be a transition year, representing a low point in our COVID-related revenues. Let me provide a little bit more color on that. I will start with Comirnaty in the U.S. as an example. In 2022, 31% of the population, or 104 million Americans, received on average 1.4 doses of COVID-19 vaccines for a total of 144 million doses.

Comirnaty’s share was 64%, or 92 of these 144 million doses, as you can see in the first column. In 2023, we expect about 24% of the population, or 79 million people, to receive vaccine doses for COVID during this year. This drop is due to expected fewer primary vaccinations and reduced compliance with recommendations. We expect they will receive about 1.3 doses per person on average in 2023. The drop is because fewer people are expected to receive their primary doses and, for the most part, only those who are older or at higher risk are expected to continue receiving more than one booster per year. This should result in about 102 million total vaccine doses administered in 2023. We believe Pfizer will maintain at least its 64% market share and therefore expect about 65 million doses of the Pfizer-BioNTech vaccine to be administered in 2023.

In 2024, we expect the utilization rates and market share figures to stabilize and come in roughly the same as in 2023. Then starting in 2025, and continuing in 2026 and beyond, we expect to see an increase in COVID-19 vaccination rates, assuming the successful development and approval of a COVID/flu combination product. A successful introduction of a COVID/flu combo could over time bring the percentage of Americans receiving the COVID-19 vaccine closer to the portion of people getting flu shots, which is currently about 50%. Outside the U.S., we expect these general trends to be similar with some variations from country to country. So, what does this mean for revenues? We expect 2023 to be a transition year in the U.S. In 2022, we sold at pandemic prices more doses than were eventually used.

This resulted in a government inventory build that we expect to be absorbed some time in 2023, probably the second half. Around that time, we expect to start selling Comirnaty through commercial channels at commercial prices. We expect that in years 2024 and beyond, the doses sold and doses used in a year will more closely align together and the commercial price to remain relatively stable with only inflation-like price increases. Now, let me briefly urn through Paxlovid. In 2022, we estimate that 110 million COVID-19 symptomatic infections were reported in the world, excluding China. Approximately 12% of them were treated with approximately 14 million oral therapy courses and Paxlovid had the lion’s share of them with approximately 90% market share.

Average was 86%, but in the second half of the year exceeded the 90%. Keep in mind that this reflects a full year of reported infections, but only a partial year of Paxlovid availability due to supply constraints in the first quarter of 2022. In 2023 and beyond, we expect infections to increase slightly at 2% annually, due to waning immune protection of the population resulting from reduced vaccination rates. Similarly, we expect treatment rates to increase as awareness, education and additional oral entries will grow the oral antiviral market. Finally, we expect Paxlovid to maintain very high share despite additional competitive entries, given its strong benefit-risk profile and brand recognition. So, what does this mean for revenue? As with Comirnaty, we expect 2023 to be a transition year for Paxlovid as well.

In 2022, we sold at Pandemic prices more treatment courses than were eventually used. This resulted in a government inventory build that we expect to be absorbed some time in 2023, probably second half. Around that time, we expect to start selling Paxlovid through the commercial channels at commercial prices. We expect in years 2024 and beyond that the courses sold and used will align closely together within every year. There has been a great deal of speculation regarding the new but uncertain market opportunity for Paxlovid in China, so let me share what we are seeing. We have an agreement with one company to import and distribute Paxlovid in China, local company, and we have a manufacturing agreement with another local Chinese company for local manufacturing.

Pfizer shipped only tens of thousands of courses to China in fiscal year 2022. From December, which is the first month of our non-U.S. fiscal year, through March, we expect to ship millions of courses to meet local demand. We expect we will be able to sell effectively under government reimbursement through end of March. And despite China’s recent decision not to include Paxlovid on the country’s National Drug Reimbursement List, we expect to offer the product on the private market after April 1st unless, of course, a listing opportunity opens up before then. Lastly, I want to point out that while we are expecting increased utilization in all regions of the world as infections increase, we are not including any major new non-U.S. or non-China contracts in our 2023 forecasts.

Let me close with a few thoughts regarding our scientific engine. R&D continues to be the lifeblood that fuels us as a company, which is why we plan to increase our R&D spend by at least 8.7% in 2023 to $12.4 billion and $13.4 billion range. In addition to the increased investments, we are taking steps not only to further improve our industry-leading success rates and cycle times, but also to increase overall return on investment and R&D productivity. As you have seen in the last year, we continuously prioritize our pipeline to focus on the assets that represent potential breakthroughs and have the potential for generating higher returns, putting more capital behind larger opportunities like GLP-1, flu, elranatamab, and others. We are at an inflection point to act from a position of strength with our best-in-class R&D productivity, a robust pipeline of innovative assets and one of the highest R&D budgets in the industry.

With that, I will turn it over to Dave to provide details on our fourth-quarter performance and our outlook for 2023. After Dave, Mikael will provide an update on our R&D pipeline. Take it over, Dave.

Dave Denton: Thank you, Albert, and good morning, everyone. Albert has already taken you through many of the key drivers of our full-year performance, so I will focus my opening remarks on some key highlights from the fourth quarter. Revenues grew 13% operationally, primarily driven by Comirnaty’s strong growth in developed markets following the slowdown in deliveries that we discussed in the third quarter ahead of the rollout of the bivalent booster. We also saw very strong performances from Paxlovid outside the U.S. and the ongoing launch of Prevnar 20 for adults within the U.S. Excluding direct sales and alliance revenues related to our COVID-19 products, Pfizer’s revenues grew 5% operationally in the quarter, and if recently acquired products from Biohaven and GBT are also excluded, revenues were up approximately 3% in Q4.

Reported diluted EPS this quarter grew by 48% to $0.87, while adjusted diluted earnings per share of $1.14 grew 69% on an operational basis in the quarter. Both EPS figures include a $0.32 benefit from lower acquired IPR&D expenses compared to last year’s fourth quarter. Once again in the quarter, foreign exchange movements significantly impacted our results, reducing fourth quarter revenues by approximately $2.5 billion, or 11%, and adjusted diluted earnings per share by $0.19, or 24%, compared to LY. On a full-year basis, foreign exchange negatively impacted revenues by $5.5 billion, or 7%, and adjusted diluted earnings per share by $0.36, or 9%. Turning now to 2023 and the financial outlook for the Company. Let me first point out that our approach to guidance in 2023 is fundamentally different than prior years.

Given the expected transition to commercial markets for our COVID franchise, and away from an Advanced Purchase Agreement environment, our guidance reflects our best estimates for revenues and profits for these products for the full year, not just what has been contractually secured. On a total company basis, we expect revenues of between $67 billion to $71 billion, reflecting an operational decline of 31% at the midpoint. Importantly, we expect that revenues from our business excluding COVID will grow between 7% and 9% on an operational basis in 2023. That growth is projected to be split between contributions from our new product launches, our recently acquired products, as well as our in-line portfolio. The total company revenue declines are entirely driven by our COVID products, which are expected to go from their peak in 2022 to their low point in 2023 before potentially returning to growth in 2024 and beyond.

While patient demand for our COVID products is expected to remain strong throughout 2023, much of that demand is expected to be fulfilled by products that were delivered to governments in 2022 and recorded as revenues last year. I want to point out that our total company revenue guidance range is wider than what is implied by the 7% to 9% operational growth rate range for the business excluding COVID. The wider guidance range reflects the potential volatility that we see in our COVID product revenues, given that they can be significantly impacted by factors outside of our control, such as the infection rates and the severity of the virus, as well as the timing for transitioning to a traditional commercial model here in the U.S. Now, you can see on this slide our cost and expense guidance for 2023.

As I mentioned in my remarks at our investor event in December, both SI&A and R&D expenses are expected to be significantly higher in 2023 versus 2022, despite the fact that our overall revenues are coming down. Higher investments in SI&A are significantly focused on the successful launches of the large number of potential new products that Albert highlighted, as well as recently acquired assets. Additionally, the expected commercial launch of both Comirnaty and Paxlovid in the U.S. will require additional investments as we transition away from the government market. These investments are squarely focused on supporting the Company’s 2025 to 2030 growth aspirations. We also intend to invest significantly into our research efforts this year, with multiple exciting and potentially high-value programs receiving additional funding, including our oral GLP-1 programs, elranatamab, and respiratory combination vaccines.

All of this spending to support our commercial and research activities, we believe, will not only yield an attractive return, but will also contribute toward setting us on a path to achieve our long-term growth goals. I’ll point out that when you exclude revenues and expenses related to COVID products, our expected operating margin profile this year is largely consistent with the prior year. This reflects incremental investments in SI&A related to launch products and R&D, as well as lower acquired IPR&D. In 2023, we are investing in both R&D and SI&A in advance of revenue contributions from new products. Looking longer-term, we expect this spending will be maintained, with the P&L growing into this cost base as new product revenues begin to be fully realized, with margins improving as a result.

Given that 2023 is both a year of investment and transition, I thought it would be helpful to outline many of our key assumptions built into our guidance. I don’t intend to walk you through all the elements here, but both slides 19 and 20 outline many of the details. In summary, these assumptions include: strong revenue growth of 7 to 9% in our business excluding COVID products; additional investments in SI&A and R&D to support Pfizer’s near- and longer-term growth plans; continued patient demand for our COVID-related products worldwide, with vaccination rates declining slightly and utilization of treatments slightly increasing; rephasing of the European Commission Comirnaty contract over multiple years versus full delivery in 2023; and, finally, U.S. commercialization of the COVID products in the second half of 2023.

In summary, as we enter a new year, our business is extremely strong, with many in-line, acquired and expected launch products capable of driving strong growth with an attractive pipeline of potential products coming in the future. We believe 2023 will be an important year for Pfizer, and that is why we are deploying our resources into quality execution in order to fully realize the growth opportunities we see within our portfolio and pipeline, which have the potential to impact our growth outlook through 2030 and beyond. So, with that, let me turn it over to Mikael.

Dr. Mikael Dolsten: Thank you, Dave. Today, I want to set the stage for an anticipated catalyst-rich 18 months. As Albert mentioned, we are in a position of unprecedented strength in our history and I’m excited to share a high-level overview of an evolved strategy for Pfizer R&D to focus our resources on transformative programs which could be most impactful for patients, drive improved return on R&D investment and create the most value. We will leverage and continue to innovate our powerhouse capabilities in medicine design, and continue to innovate light-speed drug development to further improve our industry-leading success rates and cycle times. We have rethought our approach to rare disease and will move from having a standalone research unit to aligning key programs with other therapeutic areas.

We plan to externally advance rare disease programs that do not fit into a core therapeutic area of focus. At the same time, we plan to tap into the expanding external innovation ecosystem by actively pursuing biotech innovation and emerging innovation that fits strategically and accessing external assets that are differentiated. Taken together we believe these actions will help position us to lead the industry in reaching more patients with the most impactful near-term blockbuster breakthroughs while driving forward the next wave of innovations. I’m pleased to share some examples with you today. We are pursuing potentially transformative efficacy in our inflammation & immunology franchise, with the potential launches of etrasimod in ulcerative colitis and ritlecitinib in alopecia areata, which both have the potential to be blockbusters, and a planned Phase 3 study start of anti-interferon Beta in dermatomyositis and other idiopathic inflammatory myopathies.

Our next wave of innovation includes two monoclonal antibody candidates for atopic dermatitis which exemplify our multispecific platform and in-house biomedicine design expertise. Two assets currently in Phase 1 clinical trials each target three cytokines in a single therapeutic, so we refer to them as trispecifics. On the right are Phase 1 pharmacokinetic profiles of the average plasma concentration. For both molecules, the profiles suggest that once-a-month, or even less frequent, subcutaneous dosing may be supported. There is potential for improved efficacy with more potent interleukin 4 and interleukin 13 neutralization plus an expanded breadth of efficacy by blocking Thymic Stromal Lymphopoietin to potentially cover more endotypes, or by blocking interleukin 33 (sic) to potentially enhance itch reduction.

The Phase 1 studies continue. We aim to bolster our 30-year experience in hematology with a strong pipeline that complements our in-line portfolio and collectively has blockbuster potential. I will talk more about elranatamab and GBT-601 in a moment, so will highlight here that we expect multiple data readouts for TTI-622 in hematological malignancies, two Phase 3 readouts for inclacumab in sickle cell disease in the second half of 2024 and a Phase 3 readout for marstacimab in patients with hemophilia A or B in the second quarter of 2023. Marstacimab has FDA Fast Track designation for both, hemophilia A and B with inhibitors. If successful, we project submitting for the non-inhibitor indication in both A and B hemophilia in the third quarter of 2023.

We recently announced positive top-line results from a Phase 3 study of our hemophilia B gene therapy candidate and expect a pivotal readout for our hemophilia A gene therapy in the first half of 2024. We recently presented strong updated Phase 2 data on elranatamab, our investigational B-cell maturation antigen, or BCMA, CD3-targeted bispecific antibody, for relapsed or refractory multiple myeloma in heavily pre-treated patients who had received at least three classes of prior therapies. This candidate, which has the potential to be a leader in the BCMA bi-specific class, demonstrated a high objective response rate of 61% in patients with no prior BCMA-targeted treatment, early and deep responses, and a manageable safety profile. Given factors currently limiting the availability of novel therapies in the triple-class exposed setting, elranatamab has the potential to reach a broader and greater number of patients as an off-the-shelf option with reduced dosing frequency that is administered subcutaneously, offering more convenience than intravenous administration.

With FDA Breakthrough Therapy Designation granted last year, elranatamab could potentially be approved this year. As there is blockbuster potential and patient value beyond the triple-class refractory population, our clinical strategy aims to move to earlier lines of therapy and combination approaches with the potential, if successful, for multiple approvals to expand eligibility and duration of therapy. Now, to our next generation oral, once-daily, hemoglobin S polymerization inhibitor candidate that’s in a unique class and has the potential to expand the prophylactic treatment of people with sickle cell disease. Standard-of-care treatment rates have typically been low due to side effects, poor efficacy, or both. While Oxbryta made substantial progress in preventing hemoglobin polymerization, or sickling, GBT-601 is a potentially best-in-class candidate which may improve both hemolysis and frequency of vaso-occlusive crises.

The most recent data from our Phase 1 multiple ascending dose study showed improvements in hematocrit and hemoglobin levels over time, mean hemoglobin occupancy of more than 32% for the 100 milligram maintenance dose and more than 41% for the 150 milligram maintenance dose, and improvements in red blood cell health with the higher maintenance doses. The maintenance doses were well tolerated. We believe these results may be transformative for patients, with a potential to achieve 35% to 45% hemoglobin occupancy, which is considered optimal for both hemoglobin oxygen affinity and preventing sickling, and approaches levels seen with gene therapies. This asset is also being studied in an ongoing Phase 2 study with a seamless Phase 2/3 design. We plan to start the Phase 3 part in the second half of 2023.

Next, we aim to expand our leadership in breast cancer with a pipeline of complementary next-wave candidates. Our CDK4 inhibitor targets improving on CDK4/6 inhibition standard of care by maximizing CDK4 coverage. We are studying it in Phase 1 in hormone receptor positive/HER2 negative metastatic breast cancer as a single agent and in combination with endocrine therapy. The majority of hormone receptor positive breast cancers express low CDK6, while CDK4 is likely to be a major cell cycle driver. We have seen that CDK4/6 inhibition can lead to neutropenia that requires more frequent blood test monitoring, mostly driven by CDK6 inhibition, and that complete CDK4 inhibition by CDK4/6 inhibitors is challenging due to dose-limiting hematological adverse events.

In the Phase 1 combination study, the confirmed objective response rate in combination with fulvestrant or letrozole reached nearly 30% and the clinical benefit rate was approximately 50% in 21 patients with measurable disease. The median progression-free survival was more than 24 weeks in 26 patients including 5 without measurable disease. All participants were heavily pre-treated with a median of four lines of prior treatment. All patients received prior CDK4/6 inhibitor treatment and 67% received prior fulvestrant. The asset was well tolerated with CDK4 drug showing only 15% Grade 3 neutropenia and no Grade 4. Here, we show a scan of a patient who achieved partial response and was on treatment for 47 weeks. She had received six lines of prior treatment, including CDK4/6 inhibition and fulvestrant.

We are currently engaged in dose optimization, enrolling CDK4/6-naïve cohorts, and planning to start a randomized study in second-line treatment of estrogen receptor positive/HER2 negative metastatic breast cancer this year. Additional data readouts from our next wave of breast cancer candidates are anticipated in the first half of 2023. In addition to the assets I spoke about today, we anticipate multiple milestones over the next 18 months. We expect a pivotal IBRANCE readout in hormone receptor positive/HER2 positive metastatic breast cancer, a pivotal study start for ARV-471 and a Phase 2 readout for our KAT6 inhibitor. We have achieved incredible advancement in our vaccines portfolio, including candidates that harness our leadership in mRNA, with an unprecedented number of milestones expected.

In addition to the expected launches shown here, we expect a Phase 3 data readout from our modRNA flu candidate vaccine, and a potential respiratory combination vaccine study start. A Phase 1/2 study of our shingles candidate, the first mRNA-based shingles vaccine program, began last week. In inflammation & immunology as well as internal medicine, key catalysts include potential launches of potential blockbusters, a planned pivotal study start with anti-interferon Beta and data readouts in metabolic disease. We’re also making good progress in our anti-infectives portfolio, including anticipating full approval for Paxlovid, and planned study starts for both our second-generation COVID-19 antiviral candidate, which may have no or limited drug-drug interactions, and our RSV antiviral candidate.

In closing, we are very optimistic about the many transformative catalysts emerging from the pipeline. Pfizer scientists are working with urgency and commitment to help the most patients as quickly as we can. Thank you. Let me turn it over to Chris to start the Q&A session.

Chris Stevo: Thank you, Mikael. Chelsea, why don’t you poll for questions, please? We’ll take as many questions as time permits and Investor Relations will be available after the call to answer any detailed questions that we’re not able to address on the call itself.

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Q&A Session

Operator: Yes, sir. And we’ll take our first question from Louise Chen with Cantor.

Louise Chen: So first question I have for you is due expect your COVID/flu combo to be on an mRNA platform? And then, I wanted to ask you on this RSV vaccine, there’s a few players in the space. And just wondering if you think anybody could potentially get a preferential recommendation from ACIP or is that really hard to achieve? And the last question is on your trispecific monoclonal antibodies. Is atopic dermatitis still a key focus for you? And if so, are you moving the focus to this monoclonal antibody, or are you still focused on etrasimod for atopic dermatitis and also you had an oral PD — sorry, a topical PDE4 that was in development? Thank you.

Dr. Albert Bourla: Thank you, Louise. Clearly, for the ACIP, will depend on the data and it’s difficult now to say if preferential could be achieved or not. But for both questions, COVID/flu is mRNA, RSV is not, Mikael, and then also what about the trispecific antibodies?

Dr. Mikael Dolsten: So, as Albert spoke about Cibinqo’s expansion, we think there’s room for many opportunities in atopic dermatitis. We wanted to highlight this as a really novel pioneering approach to go beyond the current antibodies in atopic dermatitis with potentially many other allergic diseases. But there is room for several products in our pipeline in both oral and topical segment, as you mentioned. So, this is an area, I think, we will excel in.

Dr. Albert Bourla: And what about COVID/flu that is mRNA and RSV that it is not mRNA? How do you think about it?

Dr. Mikael Dolsten: Well, I think it actually offers an opportunity when you have the breadth to have a pipeline with different platforms. We think that the COVID/flu, which contains six components, and we have made a real good progress in enrolling the study in which start to share data in the near future has, by itself, of course, a Fast Track forward pending data. But for the use of a potential triple vaccine, rather than adding up more and more mRNA with the current technology that we have seen can lead to ritlecitinib limitation and less tolerability, we think this flexibility to add on a protein may give you the perfect balance between efficacy and tolerability.

Dr. Albert Bourla: Thank you, Mikael. And also to — as you know, we are mastering multiple technologies in vaccine. So, we are using fit for purpose here. Every time we feel that the technology is appropriate for the problem we’re trying to solve, we apply this technology. Flu and COVID, they are — speed is of essence because there are variants that are coming. So mRNA is ideal position to address this challenge. With RSV, the virus is not changing that often. So, a protein approach that has a brilliant tolerability profile, almost like — when we saw the data, the responses of the vaccine arm compared to the placebo arm were very difficult to separate, with very, very high efficacy in our case. I think it’s the best way to move forward. That’s the benefit having multiple approaches and multiple technologies. Next question, please.

Operator: Our next question will come from Terence Flynn with Morgan Stanley.

Terence Flynn: Maybe two-part for me. I was just wondering if you can provide any more details on European vaccine — the European vaccine contracts that were extended. Just wondering if you were able to secure a higher average price, given some of the headlines in the press earlier this week. And then, latest thinking on Paxlovid commercial pricing in the U.S. as well, was wondering if you could weigh in on that. And then the second question relates to economics with BioNTech on a combo vaccine. Just wondering how that will work in the event that you do go forward with a combined COVID and seasonal flu messenger RNA vaccine. Thank you.